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JD2m allocated to fund SMEs in several underprivileged areas

By Dana Al Emam - Feb 09,2015 - Last updated at Feb 09,2015

AMMAN — Authorities will provide JD2 million in subsidised funding for local small- and medium-sized projects in underprivileged areas under an agreement signed Monday.

The agreement, signed by the Planning Ministry and the Development and Employment Fund (DEF), will benefit residents of Ajloun, Mafraq and Tafileh governorates, as well as inhabitants of the badia and the Jordan Valley.

Planning Minister Ibrahim Saif said the move aims to assist “productive, profitable, job-creating projects” especially since most of those interested in starting businesses do not have the funding guarantees that commercial banks require.

Saif noted that a single project can obtain up to JD15,000 in funds, with a 12-month grace period over the loan’s eight-year repayment period, adding that the “highly subsidised” annual murabaha rate (an Islamic finance and investment instrument) is as low as 3 per cent.

“If the project lasts for over three years, the beneficiary receives a 5 per cent incentive discount on the overall value of the loan after the first year, 10 per cent after the second year and 15 per cent after the third year,” he told reporters.

Saif said JD250,000 will be allocated for each targeted governorate or development zone, in addition to JD500,000 for projects in the Jordan Valley, noting that the project mainly targets young people.

The agreement is a continuation of the ministry’s support for DEF projects that seek to fund entrepreneurial and micro-projects, according to DEF Director General Abdullah Freij.

“The ministry has so far provided the fund with grants worth JD16 million through its programme to boost economic and social productivity,” he said, adding that the total amount of accumulative loans the fund provides to beneficiaries in cooperation with the ministry exceeds JD30 million.

Freij noted that more than 7,000 projects were financed by that cooperation, creating over 10,000 job opportunities across the Kingdom.

“Today’s agreement is expected to finance 250 new small projects and create some 500 jobs this year,” he said, highlighting the role of small businesses in securing jobs for fresh graduates, especially with the “very limited opportunities” in the public sector.

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